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Evolent Health Inc. (EVH)
:EVH
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Evolent Health
(NYSE:EVH)
50Neutral
Positive Factors
Artificial Intelligence Investment
Investments in Evolent Health's artificial intelligence engine are expected to result in significant cost efficiencies, with $50M of annualized improvements once fully implemented.
Contract Expansion
Evolent Health has signed a Technology and Services contract expansion with a large New England health plan, indicating strong sales momentum and demand.
Customer Retention
Evolent Health reported 100% logo retention for its top customers, which contribute to 90% of its consolidated revenue, highlighting strong customer loyalty.
Negative Factors
Cost Pressures
Elevated cancer costs continued to negatively impact profitability.
Headwinds
Key headwinds impacting adjusted EBITDA in 2025 include technology investments, membership declines, and higher oncology costs.
Revenue Guidance
Evolent Health's 2025 revenue and adjusted EBITDA guidance are below previous estimates and consensus expectations.
Evolent Health (EVH) vs. S&P 500 (SPY)
Market Cap
$1.12B
Dividend YieldN/A
Average Volume (3M)2.91M
Price to Earnings (P/E)―
Beta (1Y)>-0.01
Revenue Growth30.09%
EPS Growth36.14%
CountryUS
Employees4,500
SectorHealthcare
Sector Strength74
IndustryMedical - Healthcare Information Services
Share Statistics
EPS (TTM)-0.81
Shares Outstanding116,591,150
10 Day Avg. Volume2,677,412
30 Day Avg. Volume2,910,281
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.44
Price to Cash Flow (P/CF)-10.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.77Price Target Upside64.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
Evolent Health Business Overview & Revenue Model
Company DescriptionEvolent Health (EVH) is a healthcare company that provides technology-driven solutions to healthcare providers and payers. The company focuses on helping health systems and physician organizations transition to value-based care, where the emphasis is on optimizing health outcomes and reducing costs. Evolent Health's core offerings include clinical and administrative solutions, performance improvement services, and a proprietary platform designed to enhance clinical and financial performance.
How the Company Makes MoneyEvolent Health makes money primarily through service fees and performance-based arrangements with healthcare providers and payers. The company generates revenue by offering a suite of services that include consulting, technology solutions, and managed care services. Evolent Health partners with health systems and physician organizations to improve operational efficiency and patient outcomes, often entering into multi-year agreements where fees are tied to achieving specific performance targets. Additionally, Evolent's value-based care platform allows partners to transition from fee-for-service models to value-based care models, and the company may receive a share of the cost savings achieved through these initiatives. Key revenue streams include technology platform subscriptions, implementation fees, and shared savings arrangements.
Evolent Health Financial Statement Overview
Summary
Evolent Health is experiencing strong revenue growth, yet profitability remains a concern due to negative EBIT and net income margins. The balance sheet shows improved leverage, but cash flow challenges persist due to high capital expenditures.Income Statement
Evolent Health has experienced consistent revenue growth, with a notable increase of 30% from 2022 to 2023 and 2023 to 2024. However, the company is struggling with profitability, as indicated by negative EBIT and net income margins. Despite the growing revenue, the net profit margin remains negative, which poses a challenge for future profitability.60
Neutral
Balance Sheet
The debt-to-equity ratio has improved over time, falling from 0.40 in 2023 to 0.22 in 2024, indicating a stronger equity position. However, the company has negative net income, impacting the return on equity. The equity ratio is relatively stable, suggesting a balanced asset structure. Continued focus on reducing liabilities relative to equity is necessary.55
Neutral
Cash Flow
Operating cash flow turned positive in 2024, but free cash flow remains negative due to high capital expenditures. The operating cash flow to net income ratio has improved, indicating better cash management despite persistent net losses. Free cash flow to net income remains challenging, reflecting ongoing cash utilization issues.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.55B | 1.96B | 1.35B | 907.96M | 1.02B | Gross Profit |
| 367.35M | 460.47M | 316.58M | 250.41M | 321.06M | EBIT |
| -40.48M | -71.21M | -59.84M | 30.25M | -37.88M | EBITDA |
| 80.06M | -24.79M | 43.75M | 55.66M | -241.38M | Net Income Common Stockholders |
| -61.62M | -113.04M | -18.70M | -30.28M | -334.25M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 163.50M | 192.82M | 188.20M | 266.28M | 340.49M | Total Assets |
| 2.54B | 2.68B | 1.82B | 1.42B | 1.37B | Total Debt |
| 223.15M | 644.80M | 476.12M | 280.47M | 359.78M | Net Debt |
| 118.95M | 451.97M | 287.92M | 14.19M | 19.29M | Total Liabilities |
| 1.54B | 1.61B | 957.88M | 725.83M | 750.59M | Stockholders Equity |
| 1.00B | 1.07B | 859.42M | 693.63M | 619.60M |
| Cash Flow | Free Cash Flow | |||
| -6.13M | 113.84M | -49.91M | 13.76M | -45.70M | Operating Cash Flow |
| 18.77M | 142.58M | -11.55M | 38.75M | -16.23M | Investing Cash Flow |
| -62.93M | -415.54M | -259.12M | -15.79M | 261.07M | Financing Cash Flow |
| -565.00K | 281.34M | 131.54M | -29.55M | -11.86M |
Evolent Health Technical Analysis
Negative
9.58
Price Trends
9.97
Negative
12.01
Negative
18.54
Negative
Market Momentum
-0.05
Negative
49.09
Neutral
58.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVH, the sentiment is Negative. The current price of 9.58 is above the 20-day moving average (MA) of 9.42, below the 50-day MA of 9.97, and below the 200-day MA of 18.54, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 49.09 is Neutral, neither overbought nor oversold. The STOCH value of 58.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EVH.
Evolent Health Risk Analysis
Evolent Health disclosed 60 risk factors in its most recent earnings report. Evolent Health reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Evolent Health Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $17.10B | 15.31 | 27.07% | ― | 19.24% | 8.57% | |
75 Outperform | $29.22B | 9.43 | 12.65% | ― | 5.89% | 27.09% | |
67 Neutral | $32.12B | 26.65 | 7.40% | 1.33% | 10.70% | -49.85% | |
65 Neutral | $472.77B | 33.33 | 15.88% | 1.58% | 8.35% | -35.14% | |
50 Neutral | $1.12B | ― | -5.96% | ― | 30.09% | 36.14% | |
49 Neutral | $6.94B | 0.66 | -52.58% | 2.47% | 22.65% | 0.94% | |
45 Neutral | $1.90B | ― | -14.75% | ― | -32.45% | 80.24% |
* Healthcare Sector Average
Performance Comparison
EVH
Evolent Health
9.68
-22.45
-69.87%
CNC
Centene
59.34
-18.22
-23.49%
HUM
Humana
271.72
-72.76
-21.12%
MOH
Molina Healthcare
312.65
-105.79
-25.28%
UNH
UnitedHealth
516.50
31.94
6.59%
CLOV
Clover Health Investments
3.81
3.03
388.46%
Evolent Health Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -10.55% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
Evolent demonstrated strong revenue growth and successful contract renewals, but faced challenges with oncology expenses and Medicaid headwinds. The company is investing in efficiency improvements and has renegotiated contracts to improve EBITDA, yet projects a cautious outlook for 2025.Highlights
Significant Revenue Growth
Evolent ended 2024 with revenue of $2.55 billion, reflecting a 30% growth compared to 2023.
New Contracts and Expansions
Evolent announced a technology and services contract with a large health plan in New England, covering 1.9 million new members, and a partnership with a primary care practice in the mid-Atlantic region for complex care services.
100% Logo Renewal Rate
Evolent achieved a 100% logo renewal rate for its top customers in 2024, representing more than 90% of its revenue.
Performance Suite Contract Renegotiations
Evolent secured $115 million in projected adjusted EBITDA improvement from renegotiating three Performance Suite contracts.
Investment in Automation and Efficiency
Evolent expects to achieve over $50 million in net value from automation and efficiency efforts, with a $20 million improvement anticipated by the end of 2025.
Lowlights
Oncology Expenses Impact
Adjusted EBITDA was at the low end of guidance due to elevated oncology expenses in the Performance Suite.
Medicaid Redetermination Headwinds
Product membership was up by only 4% year-over-year, impacted by a 6% estimated headwind from Medicaid redeterminations.
2025 EBITDA Guidance Below Expectations
Evolent projects 2025 adjusted EBITDA between $135 million and $165 million, with considerations for elevated oncology cost trends and investments in automation.
Company Guidance
In the Evolent Earnings Conference Call for the fourth quarter and year-end of 2024, several key metrics and guidance were provided for 2025. The company reported revenue of $2.55 billion for 2024, reflecting a 30% growth from 2023. Adjusted EBITDA was $160.5 million, at the low end of the guidance range due to elevated oncology expenses. For 2025, Evolent forecasts revenue growth of approximately 15% to 18%, with adjusted EBITDA projected between $135 million and $165 million. The company highlighted significant contractual updates, including a renewed and expanded contract with a large health plan in New England and a partnership with a primary care practice in the mid-Atlantic region, adding 1.9 million tech and services product members. Evolent also secured $115 million in projected adjusted EBITDA improvement through renegotiations and expects $20 million in cost improvements from automation by the end of 2025. Despite potential headwinds, including a $25 million impact from elevated oncology cost trends, the company expressed confidence in its conservative assumptions and its plans for growth and operational efficiency.Evolent Health Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Evolent Health Strengthens Board with Strategic Changes
Neutral
Feb 4, 2025
On February 3, 2025, Evolent Health entered into a Cooperation Agreement with Engaged Capital, resulting in the appointment of Brendan Springstubb to its Board of Directors. Additionally, M. Bridget Duffy resigned from the Board, not due to any disagreements. These changes are part of Evolent’s ongoing corporate governance enhancement efforts, highlighted by the upcoming appointment of Richard Jelinek as Chair of the Board at the 2025 Annual Meeting and the search for a new independent director. The agreement with Engaged Capital includes standstill restrictions and stipulations regarding voting and nominations, aimed at ensuring strong shareholder collaboration and enhancing Evolent’s competitive position in the healthcare industry.
Business Operations and StrategyFinancial Disclosures
Evolent Health to Present at J.P. Morgan Conference
Neutral
Jan 13, 2025
Evolent Health announced its upcoming presentation at the 43rd Annual J.P. Morgan Healthcare Conference, highlighting its financial outlook and strategic direction. The company aims for significant revenue growth and improved Adjusted EBITDA through updated Performance Suite contracts and expansions in T&S solutions, despite facing industry challenges such as plan terminations and rising oncology costs.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.